Contract Law Essentials
83 Questions
6 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which of the following is NOT a requirement for a valid contract?

  • Legality
  • Loyalty (correct)
  • Consensus
  • Capacity

    • The principle of 'freedom of contract' allows individuals to decide the terms of their agreements.

    True

    What is the term for the idea that contracts must be honored and enforced by courts?

    sanctity of contract

    An agreement must be capable of ________ when it is entered into.

    <p>performance</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Consensus = Agreement of the parties on material aspects Capacity = Ability of parties to enter a contract Legality = The presence of legally acceptable subject matter Certainty = Definiteness of the obligations in the agreement</p> Signup and view all the answers

    In Bloom v American Swiss Watch Co, what formed the basis of the contract?

    <p>The performance of a specified act in response to an advertisement</p> Signup and view all the answers

    The principle of privity of contract allows third parties to enforce agreements made between two parties.

    <p>False</p> Signup and view all the answers

    List one of the cornerstones of a contract.

    <p>Consensus or reliance or good faith or privity of contract</p> Signup and view all the answers

    Which theory states that a contract is formed when the offeree expresses acceptance?

    <p>Declaration theory</p> Signup and view all the answers

    A vague contract offer can still be enforceable.

    <p>False</p> Signup and view all the answers

    What does 'animus contrahendi' mean?

    <p>intention to contract</p> Signup and view all the answers

    A company can act through an agent authorized in writing by the ______.

    <p>company</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Alienation of land = Transfer of land ownership Notarial execution = Signing of a document by a notary Expedition theory = Contract formed upon posting acceptance Error in corpore = Mistake regarding the subject matter</p> Signup and view all the answers

    According to the Alienation of Land Act, which of the following is true regarding deed of alienation?

    <p>It must be signed by parties involved.</p> Signup and view all the answers

    Oral antenuptial contracts are always valid against third parties.

    <p>False</p> Signup and view all the answers

    What is a common example of a contract contrary to good morals?

    <p>Agreement to pay for sexual services</p> Signup and view all the answers

    Mistake concerning the subject matter of the contract is known as ______.

    <p>Error in corpore</p> Signup and view all the answers

    Match the case examples with their descriptions:

    <p>Maresky v Morkel = Mistake regarding property location Maseko v Maseko = Contract to mislead creditors Alienation of Land Act = Regulates land transactions Deeds Registries Act = Regulates antenuptial contracts</p> Signup and view all the answers

    When is a contract concluded according to the reception theory?

    <p>When the offeror learns of the acceptance</p> Signup and view all the answers

    Contracts that violate public policy are deemed void.

    <p>True</p> Signup and view all the answers

    What must occur for a company to sign a deed of alienation?

    <p>It must be signed by authorized agents.</p> Signup and view all the answers

    Contracts that are based on misrepresentation or duress may result in improper ______.

    <p>consensus</p> Signup and view all the answers

    What is a key requirement for valid antenuptial contracts?

    <p>Must be executed in the presence of a notary.</p> Signup and view all the answers

    Which of the following contracts is considered illegal and void?

    <p>A contract aimed at circumventing a law</p> Signup and view all the answers

    A pactum de quota litis is considered a legal agreement in most jurisdictions.

    <p>False</p> Signup and view all the answers

    What is the term used when an illegal contract creates no obligations?

    <p>ex turpi causa</p> Signup and view all the answers

    An agreement in which one party improperly assists another party in litigation is known as __________.

    <p>maintenance</p> Signup and view all the answers

    Match the following types of mistakes with their definitions:

    <p>Unilateral mistake = Only one party is mistaken Mutual mistake = Both parties misunderstand each other Common mistake = Both parties share an incorrect assumption</p> Signup and view all the answers

    In determining if a contract is against public policy, which of the following factors is considered?

    <p>Inequality of bargaining power</p> Signup and view all the answers

    Contracts that are deemed illegal can still be enforced if both parties agree.

    <p>False</p> Signup and view all the answers

    What are the two types of illegal agreements recognized in English law related to litigation funding?

    <p>Champertous agreements and maintenance agreements</p> Signup and view all the answers

    The necessity to do simple justice between parties is informed by the concept of __________.

    <p>Ubuntu</p> Signup and view all the answers

    Match each court case with its significance:

    <p>Barkhuizen v Napier = Considers fairness in contracts Brisley v Drotsky = Involves enforcement of non-variation clauses Sasfin principle = Concerns exceptional unfairness in contract enforcement</p> Signup and view all the answers

    What is the consequence of a common mistake in a contract?

    <p>The contract is void</p> Signup and view all the answers

    Performance of an illegal contract by one or both parties makes the contract legal.

    <p>False</p> Signup and view all the answers

    What classification of mistake occurs when both parties are unaware of their respective errors?

    <p>Mutual mistake</p> Signup and view all the answers

    A contract that is aimed at circumventing a law is called __________.

    <p>in fraudem legis</p> Signup and view all the answers

    Which of the following best describes a unilateral mistake in contract law?

    <p>One party is mistaken while the other is aware</p> Signup and view all the answers

    What principle prohibits the enforceability of illegal contracts?

    <p>ex turpi causa non oritur actio</p> Signup and view all the answers

    In Khan v Naidoo, why was the appellant bound to the suretyship despite her mistaken belief?

    <p>The mistake did not influence her decision to sign.</p> Signup and view all the answers

    A non-material mistake excludes actual agreement between the parties.

    <p>False</p> Signup and view all the answers

    What is the difference between a mistake of law and a mistake of fact?

    <p>A mistake of law involves errors regarding legal rights, while a mistake of fact involves errors about factual circumstances.</p> Signup and view all the answers

    A ______ mistake is one that vitiates actual consensus between parties.

    <p>material</p> Signup and view all the answers

    Match the types of impossibility with their descriptions:

    <p>Subjective impossibility = Party cannot perform their obligation at that time. Objective impossibility = No one can perform the obligation at all. Factual impossibility = Performance is impossible regardless of its existence. Practical impossibility = Performance may be possible but excessively costly.</p> Signup and view all the answers

    What does a non-variation clause in a contract typically state?

    <p>Any modification must be in writing and signed.</p> Signup and view all the answers

    A contract can be void due to legal impossibility.

    <p>True</p> Signup and view all the answers

    What does the term 'consensus ad idem' refer to?

    <p>Agreement of the parties on the same matter.</p> Signup and view all the answers

    In the context of impossibility, an example of ______ is when a seller cannot deliver goods due to their absence in supply.

    <p>subjective impossibility</p> Signup and view all the answers

    Match the legal cases with their significance:

    <p>Khan v Naidoo = Confirms that a mistake must influence the decision to be relevant. Kimberley Share Exchange Co v Hampson = Mistake of law disclosed no legal ground for defence. Van Aartsen v Van Aartsen = Mistake of law related to motive does not exclude consensus. SA Sentrale Ko-operatiewe Graanmaatskappy v Shifren = Recognized validity of non-variation clauses.</p> Signup and view all the answers

    What is necessary for a contract to be valid concerning performance?

    <p>The performance must be possible and not illegal.</p> Signup and view all the answers

    A material mistake can lead to a valid contract if all parties agree.

    <p>False</p> Signup and view all the answers

    When does practical impossibility arise?

    <p>When performance is possible but excessively costly compared to its value.</p> Signup and view all the answers

    The ______ principle relates to contractual variations and their enforceability.

    <p>Shifren</p> Signup and view all the answers

    What type of mistake typically does not exclude a valid contract?

    <p>Non-material mistake</p> Signup and view all the answers

    What is the purpose of a non-variation clause in a contract?

    <p>To prevent disputes and issues of proof with oral variations</p> Signup and view all the answers

    A non-variation clause restricts the freedom of contract for both parties.

    <p>False</p> Signup and view all the answers

    What are essentialia in the context of a contract?

    <p>Distinctive terms that identify or classify a contract as a specific type.</p> Signup and view all the answers

    In a contract of lease, the essentialia refers to terms that stipulate that one party is allowed to use the property owned by another in exchange for payment of __________.

    <p>rental</p> Signup and view all the answers

    Which of the following is NOT a form of breach of contract recognized by law?

    <p>Non-assertion</p> Signup and view all the answers

    The principle of pacta sunt servanda emphasizes the importance of enforcing agreements made by parties.

    <p>True</p> Signup and view all the answers

    What is 'lex commissoria' in relation to breach of contract?

    <p>The right to cancel a contract due to the other party's breach.</p> Signup and view all the answers

    Naturalia are terms that are automatically included in contracts and can be described as implied by __________.

    <p>law</p> Signup and view all the answers

    What principle governs reciprocal contracts?

    <p>Principle of reciprocity</p> Signup and view all the answers

    In BK Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk, what is emphasized regarding obligations in a reciprocal contract?

    <p>Obligations are exchanged for each other</p> Signup and view all the answers

    A party is entitled to claim performance from another party without having performed their obligation first.

    <p>False</p> Signup and view all the answers

    Repudiation refers to a party indicating they will not honor the agreement.

    <p>True</p> Signup and view all the answers

    Match the breach of contract terms with their definitions:

    <p>Mora debitoris = Debtor fails to perform obligations on time Positive malperformance = Defective or incomplete performance Repudiation = Indicating intention not to honor the agreement Prevention of performance = Making it impossible to fulfill contract</p> Signup and view all the answers

    What right protects consumers against discriminatory marketing practices?

    <p>The right to equal treatment in the marketplace</p> Signup and view all the answers

    The Consumer Protection Act introduced a strict no-fault regime of liability for harm caused by __________.

    <p>defective products</p> Signup and view all the answers

    Parties can modify the terms of their contract as long as they abide by the __________ procedures they established.

    <p>formal</p> Signup and view all the answers

    What does estoppel relate to in the context of contract law?

    <p>Preventing a party from arguing something contrary to a previous claim or behavior.</p> Signup and view all the answers

    Which of the following is NOT a recognized form of breach of contract?

    <p>Refusal to negotiate</p> Signup and view all the answers

    All contracts have both essentialia and naturalia terms.

    <p>False</p> Signup and view all the answers

    A penalty clause is used to simplify the process of proving damages in contract breaches.

    <p>True</p> Signup and view all the answers

    Which is true about incidental terms in a contract?

    <p>They supplement or modify rights and duties</p> Signup and view all the answers

    What is 'mora creditoris'?

    <p>It refers to the creditor culpably failing to cooperate timeously with the debtor.</p> Signup and view all the answers

    The __________ clause in a contract specifies how communications should be made between the parties.

    <p>notices</p> Signup and view all the answers

    Match the following consumer rights with their descriptions:

    <p>Right to choose = Includes the right to select suppliers and examine goods Right to privacy = Protects against direct marketing Right to fair value = Ensures good quality and safety of products Right to fair and honest dealing = Protects against fraud and misleading representations</p> Signup and view all the answers

    What kind of contract clause allows a party to cancel immediately upon a breach?

    <p>Lex commissoria</p> Signup and view all the answers

    Contractual obligations can be performed in any sequence according to the law.

    <p>False</p> Signup and view all the answers

    What does 'positive malperformance' refer to?

    <p>It refers to the debtor performing their obligations in a defective or incomplete manner.</p> Signup and view all the answers

    Notices must be communicated in a form that can be __________, copied, and recorded.

    <p>read</p> Signup and view all the answers

    Which type of marketing is regulated under the Consumer Protection Act?

    <p>Bait marketing</p> Signup and view all the answers

    Study Notes

    Requirements for a Valid Contract

    • A valid contract must meet the following requirements:
      • Consensus: Both parties must agree on all material aspects of the contract.
      • Capacity: Both parties must have the legal ability to enter into a contract.
      • Formalities: If required by law, the contract must be in a specific form (e.g., written and signed).
      • Legality: The contract's subject matter must be legal.
      • Possibility: The obligations agreed upon must be capable of performance.
      • Certainty: The terms of the contract must be clear and identifiable.

    Cornerstones of a Contract

    • Core principles that govern contract law:
      • Freedom of Contract: Individuals have the right to freely choose their contracting partners and terms.
      • Sanctity of Contract: Contracts entered into willingly and seriously must be honored and enforced by courts.
      • Good Faith: Parties should act honestly and fairly in their dealings with each other.
      • Privity of Contract: A contract only creates rights and duties for the parties involved, not for outsiders.

    Offers of Reward

    • In Bloom v American Swiss Watch Co, the court held that an offer of reward made through an advertisement can be considered an offer to the public.
    • The first person who fulfills the conditions of the reward, knowing about the advertisement, accepts the offer and becomes entitled to the reward.
    • The offer must be clear and specific for this to be applicable.

    Theories of Acceptance

    • Different theories explain when and where acceptance of an offer takes effect:
      • Declaration Theory: Acceptance occurs when the offeree expresses it (e.g., by signing a letter of acceptance).
      • Expedition Theory: Acceptance takes effect when the offeree sends their acceptance (e.g., by posting a letter).
      • Reception Theory: Acceptance occurs when the letter of acceptance reaches the offeror's address.
      • Information Theory: The contract is formed when the offeror is informed of the acceptance.

    Animus Contrahendi

    • The Latin phrase "animus contrahendi" means "intention to contract".
    • It refers to a serious intent to create legally binding obligations through a contract.

    Formal Requirements for Alienation of Land

    • Section 2(1) of the Alienation of Land Act requires that any alienation of land (sale, exchange, donation) be in a deed of alienation signed by the parties or their authorized agents.
    • This requirement ensures legal certainty regarding the authenticity and contents of land contracts.
    • It does not apply to land sales at auctions but does have specific requirements for instalment sales.

    Formal Requirements for Antenuptial Contracts

    • Section 87(1) of the Deeds Registries Act stipulates that while an oral antenuptial contract is valid between the parties, it must be notarially executed and registered within three months to have effect against third parties.

    Improperly Obtained Consensus

    • Consensus can be vitiated (made invalid) through:
      • Misrepresentation: False statements made to induce someone into a contract.
      • Duress: Coercion or threat used to force someone into a contract.
      • Undue Influence: The exercise of unfair persuasion by one party over another.
    • In Maresky v Morkel, the court recognized "error in corpore" – a mistake about the core subject matter of the contract.

    Contracts Against Good Morals (Contra Bonos Mores)

    • Contracts that violate prevailing moral standards in society are void.
    • Examples:
      • Agreements involving sexual immorality (e.g., paying a prostitute).
      • Contracts that exploit or harm children (e.g., trading custody rights for money).
      • Agreements designed to mislead creditors or defraud the court.

    Illegal Contracts

    • Contracts can be void for illegality, meaning they are against the public interest.
    • Examples:
      • Contracts contrary to good morals (contra bonos mores)
      • Contracts that violate statutory law (in fraudem legis)
      • Pacta de quota litis: Agreements to share the proceeds of litigation in exchange for funding the case.
      • Champertous and maintenance agreements: Agreements where a third party improperly assists another in litigation.
      • Unfair contracts: Contracts that are excessively unfavorable to one party, potentially violating notions of fairness and justice.
      • Contracts enforced in an unfair manner, such as exploiting a situation to gain an advantage.

    Consequences of Illegal Contracts (Ex Turpi Rule)

    • An illegal contract is void and unenforceable.
    • Neither party can sue the other for performance or damages arising from the contract.
    • This principle reflects the "ex turpi causa non oritur actio" rule, meaning "from an illegal cause no action arises".

    Mistake in Contract

    • Types of mistakes:
      • Unilateral: Only one party is mistaken, the other is aware.
      • Mutual: Both parties misunderstand each other's intentions.
      • Common: Both parties share a mistaken belief about a core aspect of the contract.
      • Irrelevant: A mistake that does not affect the mistaken party's decision to enter into the contract.
      • Relevant: A mistake that influences the decision to contract, leading to dissensus (lack of agreement).
      • Material: A mistake that goes to the heart of the contract, negating true consensus.
      • Non-material: A mistake that does not affect the core aspects of the agreement but may lead to the contract being voidable (rescindable) due to other reasons (e.g., misrepresentation).
      • Mistake of law: A mistake about the legal implications of a contract.
      • Mistake of fact: A mistake about the actual facts of the contract.

    Impossibility of Contracts

    • Types of impossibility:
      • Subjective: One party is unable to perform but performance may be possible for others.
      • Objective: No one can perform the contract due to insurmountable circumstances.
      • Factual: A situation where performance is literally impossible.
      • Practical: Performance is possible but involves excessive cost or effort, making it impractical.
      • Legal: Performance is prohibited by law.

    Shifren-Principle

    • Parties can include clauses in their contracts that require specific formalities for any modification or variation of the contract.
    • This ensures stability and prevents disputes arising from informal amendments to the agreement.
    • The Shifren-Principle is based on the landmark case SA Sentrale Ko-operatiewe Graan Maatskappy v Shifren.

    Non-variation clauses

    • Non-variation clauses restrict the ability to amend contracts orally, requiring written and signed changes
    • Established in the case of SA Sentrale Ko-operatiewe Graanmaatskappy Bpk v Shifren
    • They prevent disputes and proof issues that arise from oral variations
    • Enforceable because they are freely and seriously entered into, adhering to pacta sunt servanda
    • Do not restrict freedom of contract, as parties can still agree on variations, but only in writing
    • Can lead to unjust outcomes, such as a landlord relying on the clause to cancel a contract due to a late payment
    • Courts try to soften the Shifren principle through doctrines of waiver, estoppel, pactum de non petendo and good faith
    • Brisley v Drotsky case reaffirmed the Shifren principle and its constitutional validity

    Contractual Terms: Essentialia, Naturalia, and Incidentalia

    • Essentialia are terms that define a specific contract, like the transfer of property for money in a sale.
    • Naturalia are terms implied by law and automatically included in specific contracts.
    • Incidentalia are additional terms agreed upon by the parties, modifying the rights and duties of the contract.

    Forms of Contract Breach

    • Mora Debitoris: The debtor fails to perform on time.
    • Mora Creditoris: The creditor fails to cooperate with the debtor for timely performance.
    • Positive Malperformance: The debtor performs defectively or incompletely.
    • Repudiation: A party indicates an unequivocal intention to not fulfill the agreement.
    • Prevention of Performance: A party renders performance impossible.

    Lex Commissoria

    • Entitles a party to cancel a contract due to the other party's breach of contract, as per the agreement's provisions.

    Exceptio Non Adimpleti Contractus (ENA)

    • Reciprocally linked obligations in a contract.
    • Requires parties to perform their obligations simultaneously or before the other party is obliged to perform.
    • BK Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk established the principle.

    Consumer Protection Act

    • Aims to protect consumers from unfair practices and ensure equal treatment in the marketplace.
    • Includes fundamental consumer rights:
      • Equal treatment
      • Privacy
      • Choice
      • Disclosure and information
      • Fair and responsible marketing
      • Fair and honest dealing
      • Fair, just and reasonable terms and conditions
      • Fair value, good quality, and safety

    Drafting Contracts with specific reference to clauses:

    • Description of parties: Clearly identify the parties involved in the agreement.
    • Essentialia (of sale agreement): Define the core elements of the contract early on, ensuring they are specific enough for clear performance.
    • Lex Commissoria: Explicitly outline the right to cancel in case of breach and consequences.
    • Notices and communication: Define the methods, procedures, and language for communication and notices.
    • Penalty clause: Specify a penalty for breach, aligning with the Conventional Penalties Act, giving options for compensation.

    Terminologies

    1. Lex commissoria

    forfeiture clause" or "cancellation clause." It was used in Roman law to refer to a clause in a contract of sale or pledge agreement that allowed the seller or creditor to cancel the contract if the buyer or debtor failed to pay the agreed price or debt on time.

    1. Boni mores

    Boni mores is a legal term that refers to the community's morals and legal customs. It's also used to describe good public policy, proper moral sentiment, or accepted customary practices

    1. Caveat subscriptor

    Caveat subscriptor is a Latin phrase that translates to "let the signer beware". It's a legal principle in South Africa that assumes a person has read and agreed to the terms of a contract they sign, unless proven otherwise

    1. Dictum et promissum

    Dictum et promissum is a Latin phrase that translates to "saying and promise" in English. It refers to a declaration or statement made by someone, along with a promise to fulfill or follow through with what was said.

    1. Pacta sunt servanda Agreements must be kept

    2. Ex turpi causa non oritur actio

    Ex turpi causa non oritur actio is a legal doctrine that prevents a plaintiff from seeking legal action or damages if the cause of action arises from their own illegal act. It is also known as the "Illegality Defence Principle" or the "Defence of Illegality

    1. Reliance theory

    Reliance theory is a contract law doctrine that states that a contract is formed when one party reasonably believes that the other party has agreed to the contractor

    1. The Actio legis Aquiliae is a legal action available to recover damages for the loss or destruction of property caused by someone else's fault

    2. Restitutio in integrum is a Latin phrase that means "restoration to a whole or uninjured condition". It's used in Roman and civil law, and is a guiding principle in common law negligence claims. It's also used in other legal systems to remedy harm caused by wrongful acts

    3. The Actio Redhibitoria is a legal action that allows the buyer to cancel the contract and return the defective goods in exchange for a refund of the purchase price

    4. Actio quanti minoris

    An action in which the purchaser of a good claims a reduction of the price proportionate to the reduction in value caused by a defect.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Description

    Explore the fundamental requirements and principles of contract law in this quiz. Understand concepts like consensus, capacity, and legality that help in forming a valid contract. Test your knowledge on how these cornerstones impact the enforcement of contracts.

    More Like This

    Contract Law Principles Quiz
    5 questions

    Contract Law Quiz: Test Your Knowledge of Contract Principles

    MiraculousUvarovite avatar
    MiraculousUvarovite
    Contract Law Fundamentals
    6 questions

    Contract Law Fundamentals

    SmartEllipsis avatar
    SmartEllipsis
    Contract Law Basics
    8 questions

    Contract Law Basics

    SpotlessSakura5436 avatar
    SpotlessSakura5436
    Contracts Overview
    37 questions

    Contracts Overview

    RelaxedSuprematism avatar
    RelaxedSuprematism
    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser